Third quarter 2019 Trading Update
Continued revenue growth and margin improvement
Peter OosterveerCEO
Sarah KuijlaarsCFO
Amsterdam, 24 October 2019
THIRD QUARTER 2019 TRADING UPDATE
Statements included in this presentation that are not historical facts (including any statements concerning investment objectives, other plans and objectives of management for future operations or economic performance, or assumptions or forecasts related there to) are forward-looking statements. These statements are only predictions and are not guarantees. Actual events or the results of our operations could differ materially from those expressed or implied in the forward looking statements. Forward-looking statements are typically identified by the use of terms such as “may,” “will”, “should”, “expect”, “could”, “intend”, “plan”, “anticipate”, “estimate”, “believe”, “continue”, “predict”, “potential” or the negative of such terms and other comparable terminology.
The forward-looking statements are based upon our current expectations, plans, estimates, assumptions and beliefs that involve numerous risks and uncertainties. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond our control. Although we believe that the expectations reflected in such forward-looking statements are based on reasonable assumptions, our actual results and performance could differ materially from those set forth in the forward-looking statements.
Disclaimer
24 October 2019 2
UNITED KINGDOM
Supporting on flood defenses across England
Peter OosterveerCEO
THIRD QUARTER 2019 TRADING UPDATE
Strong performance in North America, the Netherlands and Australia
Further performance improvements in Asia and Latin America
Solid results in the UK, Brexit starting to impact timing of infrastructure and buildings projects
Significant project win in digital solutions in the UK
Further strengthening of global environmental expertise by innovative PFAS treatment technology
Divestment process of non-core clean energy assets (ALEN) advancing, non-binding offers received
Continued revenue growth and margin improvement
24 October 2019 4
THIRD QUARTER 2019 TRADING UPDATE
On track to achieve 2020 strategic targetsThird quarter financials: Organic net revenue growth of 3% to €642 million (Q3 2018: €613 million) Operating EBITA increased by 17% to €53 million (Q3 2018: €45 million), resulting in an improved
margin of 8.3% (Q3 2018: 7.4%) Free cash flow of €4 million (Q3 2018: €23 million), temporarily held back by the implementation of
the new Oracle Cloud solution in North America; a delay in cash generation of around €50 million
Year-to-date financials: Net revenues €1,917 million; organic growth +2% Operating EBITA margin improved to 7.8% (2018: 7.3%) EBITDA increased by 14% to €174 million (2018: €153 million) Net debt further reduced to €386 million (2018: €468 million), free cash flow at €12 million (2018:
€17 million)
24 October 2019 5
GERMANY
(Re)building stations for S-Bahn Munich
Sarah KuijlaarsCFO
THIRD QUARTER 2019 TRADING UPDATE
Third quarter segment revenue
Q3'19 Q3'18 Org. growth %
Americas €215M €191M 9%North America 7% Environment and Water continue to drive strong resultsLatin America 20% Growth in environmental consultancy and better business environment
EME €280M €281M 0%Cont. Europe 3% Excellent performance in the Netherlands and Germany. France underperformsUK 3% Solid results, but lingering Brexit impacts timing of infrastructure and buildings projectsMiddle East -17% Middle East remains area for improvement
APAC €91M €85M 6%Australia 13% Driven by the ramp-up of larger infrastructure projects Asia 0% Focus on core activities drives margin improvement. Divestment Indonesia completed
CallisonRTKL €56M €56M -5% CallisonRTKL continues to reshape for growth under new leadershipTotal €642M €613M 3%
Net Revenue
24 October 2019 7
THIRD QUARTER 2019 TRADING UPDATE
Sustained improvement
Operating EBITA (margin)€ millions, %
45 45 44 47 49 53
7.2%7.4% 7.2%
7.5% 7.6%
8.3%
06%30,00
35,00
40,00
45,00
50,00
55,00
60,00
Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19
Net Revenues and organic growth€ millions, %
621 613 607 628 647 642
4% 4% 2% 2% 2% 3%
-20%500520540560580600620640660680700
Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19
Days Sales Outstanding and Net Working Capital % Days
91 89 80 86 82 95
18.8% 18.1%15.1%
17.4% 16.2%19.1%
00%02%04%06%08%10%12%14%16%18%20%
50
60
70
80
90
100
Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19
468 468 342 409 378 386100150200250300350400450
Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19
Net Debt € millions
24 October 2019 8
ROTTERDAM| MAASTUNNEL(1942)
Meeting demands of today while preserving monumental values
Peter OosterveerCEO
THIRD QUARTER 2019 TRADING UPDATE
Arcadis Digital Agenda
Significant contract win with Transport for London (TfL) Roll-out of single asset management tool for London Underground We will consolidate the management tool of TfL’s assets into one single digital
system; this will create efficiencies and improve reliability, safety and affordability of services for passengers across London
Arcadis’ new business entity We are creating a business entity that brings together:
Some of our existing digital capabilities; Two recent acquisitions EAMS Group and SEAMS.
What will the new business entity bring? Data-driven products and solutions through which we digitally connect our
clients to their built and natural assets, helping them make better decisions and create value
24 October 2019 10
THIRD QUARTER 2019 TRADING UPDATE
University of Sydney, 24 Sept 2019CNN, 30 Sept 2019
Arcadis signs Head of Agreement for exclusive global license of innovative PFAS treatment technology |AUSTRALIA
Arcadis offers world-class expertise and solutions to remove PFAS from water and soil
• One of the world’s biggest emerging contaminants endangering humans and the environment
• Arcadis has significant expertise and facilitated resolution of PFAS for more than 15 years, with over 75 projects in 12 countries
Arcadis part of the national PFAS Expertise Centre | THE NETHERLANDS
Arcadis designed and installed 12 large scale water treatment systems for PFAS removal in the U.S. and Germany | UNITED STATES& GERMANY
Australia…US… The Netherlands…
Dutch Financial Daily, 26 Sept 2019
Dredging sector comes to a standstill as result of stricter PFAS standards
24 October 2019 11
THIRD QUARTER 2019 TRADING UPDATE
Summary
Key Markets remain strong
Continued revenue growth and margin improvement
Management changes, simplification and greater selectivity enabled improvements in Asia and Latin America
Cash flow in the US temporarily held back by the implementation of the new Oracle Cloud solution. Actions in place to remedy the situation in the fourth quarter
Expanding capabilities in environmental consultancy and digital
Divestment process of non-core clean energy assets advancing, aspire to have agreement in 2019, but may extend into the subsequent quarter
24 October 2019 12
Arcadis.Improving quality of life.
THIRD QUARTER 2019 TRADING UPDATE
Working capital and cash collection strongly impacted by North America
Cash generation temporarily held back by the implementation of the new Oracle Cloud solution in North America
Actions we are taking allow us to remedy the situation in North America in the fourth quarter
Overdue receivables (>120 days) increase mainly due to legacy project in the Middle East
1) Excluding receivables from associates2) Calculated using annualized Q3’19 Gross Revenues
Ageing of Gross Receivables and Net Working Capital (%)
250 323 244
101898583
98
127103
113
Sep-18
523563
68
Jun-19
597
Sep-19
31-120
>120
0-30
Not past due
in € millions Sep-18 Jun-19 Sep-19Gross receivables 564 597 524
Provision receivables -55 -57 -58Provision % 10% 9% 11%
Trade receivables1) 509 541 465Net Work in Progress 281 256 406Accounts Payables -205 -228 -232
Net Working Capital 585 569 639Net Working Capital %2) 18.1% 16.2% 19.1%
24 October 2019 14